AG Bliss Co. v. United Carr Fastener Co. of Canada
| Decision Date | 18 November 1953 |
| Docket Number | Civ. A. No. 53-270-F. |
| Citation | 116 F. Supp. 291 |
| Parties | A. G. BLISS CO. v. UNITED CARR FASTENER CO. OF CANADA, LIMITED. |
| Court | U.S. District Court — District of Massachusetts |
Philip B. Goldberg, Providence, R. I., for plaintiff.
Robert W. Meserve, Nutter McClennen & Fish, Boston, Mass., for defendant.
This is an action for breach of an alleged contract whereby plaintiff licensed defendant to produce certain buckles under Canadian Patent No. 466,439, owned by plaintiff. Plaintiff is a Rhode Island corporation and defendant a Canadian corporation alleged in the complaint to be doing business in Massachusetts. Service on defendant was made by serving the Massachusetts Commissioner of Corporations under Mass.G.L. Ch. 181, § 3A. Defendant moves to quash service and to dismiss the action.
The parties are agreed that the alleged contract was made, if made at all, and the negotiations leading to it took place entirely outside Massachusetts. Plaintiff appears to concede that the service already made is ineffective and is properly to be quashed, since Ch. 181, § 3A, under which it was made, authorizes service on the Commissioner of Corporations only in causes of action arising out of business done in Massachusetts. However, since the treasurer and two other directors are residents of Massachusetts, the possibility of valid service on defendant within Massachusetts remains open.
Defendant, however, contends that the action should in any event be dismissed for lack of jurisdiction, since defendant is not doing business within the Commonwealth of Massachusetts and is not subject to the jurisdiction of the courts here.
The facts relating to the issue of whether defendant is doing business here are contained in affidavits filed by the parties and particularly in the oral deposition of Robert M. Healey, general manager of defendant.
Defendant is a Canadian corporation with its office and principal place of business in Hamilton, Ontario. It carries on manufacturing at two factories in Ontario, at Hamilton and Oakville, and maintains sales offices in Toronto and Montreal. It is a wholly-owned subsidiary of United-Carr Fastener Corporation (hereinafter called the parent corporation), a Massachusetts corporation with a principal place of business in Cambridge, Massachusetts. Both corporations make a generally similar line of products.
Defendant has never qualified to do business in Massachusetts, and maintains no office or place of business here. While there seems to have been some reference in letters or conversations to an Agreement Department of defendant in Cambridge, it appears that in fact the department in question was one maintained by the parent corporation to handle matters involving patent agreements, and that while its services were available to defendant as a subsidiary corporation, they were actually utilized by it only two or three times in the past ten years. One of these occasions was in connection with the negotiations between plaintiff and defendant which gave rise to this action. In each case where defendant used the services of this department it was billed for the use of them by the parent corporation, and paid for them.
Defendant has no employees in Massachusetts and pays no salaries to anyone in Massachusetts. Three of the five directors are residents of Massachusetts, serving with no compensation. They are also officers of the parent corporation. While it is stated in one of the affidavits filed by plaintiff that Healey once said directors' meetings were held in Massachusetts, his statement under oath in his deposition is that directors' meetings were always held in Canada. The records of defendant are kept in Canada, although duplicate copies of the minute book of the directors' meetings and of some other records are kept in the office of the parent corporation in Cambridge. There is nothing to indicate that the three Massachusetts directors ever carried on any activity on behalf of defendant while they were in Massachusetts.
The two remaining directors, Healey, and Beddoe, defendant's president, are Canadians. They actually run the affairs of the defendant from its main office in Hamilton. They visit Cambridge only two or three times a year to discuss technical production developments.
About ten per cent of defendant's purchases of materials in recent years have been made in Massachusetts, some from the parent corporation and some from other suppliers. In all cases these supplies or materials were ordered by letter from Canada for...
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Fisher Governor Co. v. Superior Court of City and County of San Francisco
...Inc., 9 Cir., 265 F.2d 768, 779; Kenny v. Alaska Airlines, D.C., 132 F.Supp. 838, 852-854; see A. G. Bliss Co. v. United Carr Fastener Co. of Canada, D.C., 116 F.Supp. 291, 294, affirmed 1 Cir., 213 F.2d 541. To hold otherwise would subject any corporation that promotes the sales of its goo......
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